The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q1 2012 Earnings Presentation
22 slides from The Travelers Companies's earnings presentation, Apr 19, 2012
Slide 1: The Travelers Companies, Inc. First Quarter 2012 Results
The Travelers Companies, Inc. First Quarter 2012 Results April 19, 2012 1
Slide 2: Long-Term Financial Strategy
Long-Term Financial Strategy Balanced Generation of Meaningful approach to top tier earnings and rightsizing capital and capital sustainable and substantially in competitive growing book excess of growth advantages value per share needs over time Create Shareholder Value Objective: Mid-Teens ROE Ove
Slide 3: First Quarter 2012 Overview
First Quarter 2012 Overview • Net and operating income per diluted share of $2.02 and $2.01, an increase of 5% and 6%, respectively, from the prior year quarter • Net and operating income of $806 million and $801 million, respectively, compared to $839 million and $826 million in the prior year quar
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax) First First Quarter Quarter 2012 2011 Change Operating income $ 801 $ 826 (3) % per diluted share $ 2.01 $ 1.89 6 % Included the following items: Net favorable prior year reserve development $ 200 $ 155 Catastrophes, net o
Slide 5: Very Strong Financial Performance
Very Strong Financial Performance ($ and shares in millions, except per share amounts) March 31, December 31, 2012 2011 Capital Debt $ 6,606 $ 6,605 • At or above target levels for all rating agencies 1 Common equity 22,034 21,606 • Repurchased $350 million of common shares and common stock Total ca
Slide 6: Net Investment Income
Net Investment Income ($ in millions, after-tax) Total Total Total • Net investment income from the long-term fixed income portfolio $617 $622 $606 $593 $573 $561 $541 declined modestly from a year ago due to lower reinvestment rates • Short-term portion of fixed income portfolio continued to be imp
Slide 7: Components of Operating Return on Equity
Components of Operating Return on Equity 9.6% 17.9% 17.7% 12.4% 14.0% 12.5% 6.1% 14.1% 14.7% 11.1% 11.0% 10.6% 1.4% 1.4% 1.6% 9.6% 9.7% 9.3% 0.8% 0.7% 8.1% 9.0% 0.5% 0.9% 1.5% 1.3% 0.4% 8.2% 0.1% 0.9% 0.1% 6.8% 6.7% 5.8% 8.7% 8.9% 8.7% 8.3% 8.3% 8.3% 8.0% 8.1% 8.4% 5.0% 4.5% 4.3% 3.2% (0.6%) (0.1%)
Slide 8: Business Insurance
Business Insurance Performance First First Quarter Quarter Third Quarter ($ in millions) 2012 2011 Change Operating income $ 612 $ 604 1 % Loss and loss adjustment ratio 57.8 % 63.1 % Underwriting expense ratio 31.8 31.8 1 GAAP combined ratio 89.6 % 94.9 % 5.3 pts Net favorable prior year reserve de
Slide 9: Business Insurance: Net Written Premium Roll Forward
Business Insurance Net Written Premium (NWP) Roll Forward ($ in million) 1Q 2011 Net Written Premiums $ 3,020 Business not retained $ (624) Exposure / other on retained business 44 Change in audit premiums & valuation 47 New business 423 (110) Rate on retained business 169 Increase in National Accou
Slide 10: Business Insurance (Ex. National Accounts)
Business Insurance (Ex. National Accounts) Illustrative Business Statistics ($ in millions) 2011 2012 1Q 2Q 3Q 4Q 1Q Retention 84% 81% 83% 78% 79% • Renewal rate change 1 Renewal premium change 1% 2% 4% 7% 9% increase attributable to higher price gains across New business $ 542 $ 518 $ 500 $ 431 $ 4
Slide 11: Business Insurance: Select Accounts
Business Insurance: Select Accounts Illustrative Business Statistics ($ in millions) 2011 2012 • Components of Select 1Q 2Q 3Q 4Q 1Q retention: Retention 81% 80% 79% 76% 75% 1Q11 1Q12 1 Renewal premium change 4% 5% 5% 8% 10% Express 81% 78% New business $ 143 $ 128 $ 117 $ 108 $ 118 Plus 81% 71% Ren
Slide 12: Business Insurance: Commercial Accounts
Business Insurance: Commercial Accounts Illustrative Business Statistics ($ in millions) 2011 2012 1Q 2Q 3Q 4Q 1Q Retention 88% 84% 86% 80% 81% 1 Renewal premium change 2% 4% 4% 8% 11% • Renewal premium change New business $ 158 $ 134 $ 135 $ 102 $ 110 was positive for the sixth consecutive quarter
Slide 13: Business Insurance: Other Business Insurance
Business Insurance: Other Business Insurance1 Illustrative Business Statistics ($ in millions) 2011 2012 1Q 2Q 3Q 4Q 1Q Retention 83% 80% 82% 79% 79% 2 Renewal premium change (1%) -% 3% 5% 8% New business $ 241 $ 256 $ 248 $ 221 $ 195 • Renewal premium change was positive for a third consecutive qua
Slide 14: Commercial Accounts: Renewal Pricing Results
Commercial Accounts: Renewal Pricing Results 1Q’12 Retention ♦ 1Q’12 Renewal Rate Change % 1 100% 20% 90% 16% Renewal Rate Change1 80% 12% Retention 70% 8% 60% 4% 50% 0% <60% 60% - 90% >90% Long-Term Loss Ratio Bands2 – All Lines of Business 1 Represents the estimated change in average premium on po
Slide 15: Financial, Professional & International Insurance
Financial, Professional & International Insurance Performance First First Quarter Quarter ($ in millions) Third Quarter 2012 2011 Change Operating income $ 149 $ 120 24 % Loss and loss adjustment ratio 46.0 % 55.6 % Underwriting expense ratio 41.8 39.7 1 GAAP combined ratio 87.8 % 95.3 % 7.5 pts Net
Slide 16: Financial, Professional & International Insurance
Financial, Professional & International Insurance ($ in millions) Illustrative Illustrative Business Business Statistics Statistics 2011 2012 1Q 2Q 3Q 4Q 1Q Surety Gross written premium $235 $235 $250 $209 $202 2 Management Liability Retention 84% 85% 87% 85% 87% Renewal premium change 1 -% -% -% 1%
Slide 17: Personal Insurance
Personal Insurance Performance First First Quarter Quarter Third Quarter ($ in millions) 2012 2011 Change Operating income $ 108 $ 170 (36) % Loss and loss adjustment ratio 68.8 % 63.4 % Underwriting expense ratio 29.0 30.8 1 GAAP combined ratio 97.8 % 94.2 % (3.6) pts GAAP combined ratio excluding
Slide 18: Personal Insurance
Personal Insurance Performance First First Quarter Quarter 2012 2011 Change 1 Agency Automobile Loss and loss adjustment ratio 71.1 % 69.2 % Underwriting expense ratio 25.4 26.6 2 GAAP combined ratio 96.5 % 95.8 % (0.7) pts Net favorable prior year reserve development 0.2 0.1 Catastrophes, net of re
Slide 19: Personal Insurance
Personal Insurance ($ in millions) Illustrative Illustrative Business Business Statistics Statistics 2011 2012 1Q 2Q 3Q 4Q 1Q 1 Agency Automobile 2,3 Retention 83% 83% 83% 84% 83% 3,4 Renewal premium change 3% 4% 4% 3% 4% PIF growth over prior year quarter 2% 1% 1% -% (1%) New business $171 $166 $16
Slide 20: Explanatory Note
Explanatory Note This presentation contains, and management may make, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as “may,” “w
Slide 21: Disclosure
Disclosure For further information, please see Travelers reports filed with the SEC pursuant to the Securities Exchange Act of 1934 which are available at the SEC’s website (www.sec.gov). Copies of this presentation and related financial supplement, and the accompanying webcast are publicly availabl
Slide 22: Additional Information
The Travelers Companies, Inc. Additional Information Additional Information 22
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